Fakih Wahyudi: Reinsurance Modelling

Reinsurance structure should has the right balance between risk and return therefore maximizing premium income and minimizing risk exposure will be main purpose of structuring treaty program of the company.
Structuring your treaty programs should consider the following things:

entity financial target
risk appetite (reinsured and reinsurer)
asset exposured
corporate plans
historical review and future target (strategic business goal)
catastrophe exposure modelling
domestic and international market review

for multi structure design company should also consider i.e insured/insurer risk appetite and also market pricing and the corporate risk transfer objectives.

All data should be elaborate and making simulation based on the history and expected event in the future. You will need discussion among underwriter and claim assessor. Reinsurance Underwriter should has optional it related to the simulation and future expected events.

As reinsurance manager, having analyze those documents, you should propose your analysis report to management with quantitative and qualitative analysis including frequency and severity and expected retention and it's exposure to equity.

The management will consider the following things before buying reinsurance such as:

data and your analysis report
profile analysis
risk driving to portfolio
simulation analysis

Final step should be analyze the structure options, it will related to insurer and reinsurers risk apptite, financial strength and your demand/supply power.

By having those stages the decision result will bring returns:

reinsurance structures/programs will bring good risk transfer balance between risk and premium
technical analysis, reinsurance analysis should an input to the underwriter
reasonable risk portfolio distrubution
profit growth.

thanks,
Fakih Wahyudi